Healthcare Reform/Reforming Healthcare

As part of our effort to keep the New Jersey biotechnology community informed on the timely and critical topic of healthcare reform, we are developing a number of initiatives aimed to help Members understand the implications of the law for their businesses as the provisions of the Patient Protection and Affordable Care Act (PPACA) take effect.

As we did at the beginning of the economic crisis when we created the ToolKit for Troubled Times, we have established the Healthcare Reform/Reforming Healthcare section of our Web site. It will allow Members to share white papers, newsletters, and other resources on healthcare reform. We aim to facilitate information sharing to aid biopharma firms as they confront questions such as:

What does healthcare reform mean for biopharma markets?

How will the cost savings measures of the PPACA affect drug payments?

BioNJ’s Healthcare Reform Committee

The effort to keep our Members informed will include this Web site resource area, regular email updates, educational programming, and related advocacy as this topic moves forward.

Thank you to the following individuals and firms for assisting us in this important effort:

Wendy Lazarus, Director, Government Relations and Public Affairs, Pfizer

Raphael Marcello, Principal, Deloitte Consulting LLP

Rohin Rajan, Manager, Deloitte Consulting LLP

Ron Seifert, Partner, Life Sciences Sector, Hay Group

Brian Wilcomes, Deloitte

BioNJ Members are invited to get involved; please let us know if you would like to do so. We hope this is helpful and welcome your feedback regarding how we can serve you better.

Whitepapers and Analysis

BioNJ is pleased to present the following analyses of Health Care Reform and its potential consequences thanks to your fellow Members. We hope you find this content useful, and we invite you to submit any materials you might find helpful to BioNJ@BioNJ.org.

A new information value chain—built on evidence-based insights—is emerging that could reconcile the divergent interests within the US healthcare industry. The ultimate beneficiary: the patient.

Explaining the Supreme Court Decision

On June 28, 2012, the Supreme Court upheld the Affordable Care Act in National Federation of Independent Business v. Sebelius. At issue were two provisions of the ACA: the individual mandate and Medicaid expansion. The court upheld the individual mandate, but struck down Medicaid expansion.

The majority opinion held that the individual mandate cannot be justified under the Constitution’s Commerce Clause, but that it can be justified as falling under the power of Congress to tax.

Of perhaps more importance to biopharma, however, is the Court’s ruling that the PPACA’s expansion of Medicaid is unconstitutional. This means that one of the provisions that would potentially have expanded the market for biopharma products will not apply, and that Medicaid expansion will take place on a state-by-state basis. The court ruled that insofar as Medicaid expansion threatens non-compliant states with losing Medicaid funding, it amounts to coercion. With Medicaid expansion struck down, this will likely mean fewer new biopharma customers. The Congressional Budget Office estimates that the court’s ruling will decrease the number of uninsured who would otherwise receive coverage under Medicaid expansion, with six million fewer people enrolled in Medicaid in 2022. Before the decision, 33 million people were expected to gain coverage under the PPACA, but now three million fewer are likely to get insurance.

Healthcare Reform Glossary

The Patient Protection and Affordable Care Act (PPACA) takes a three-pronged approach to healthcare reform: expanding Medicaid and providing subsidies to purchase private policies (this provision was subsequently struck down by the Supreme Court); reducing insurers’ abilities to deny or limit coverage; and setting up insurance exchanges to make it easier to buy individual policies. Also, PPACA introduces cost-savings measure into Medicare reimbursement, and individuals not covered by a group plan are required to buy insurance. This requirement is intended in part to offset the additional risk that insurance companies assume under provisions of the law that limit their ability to deny coverage. You can find BioNJ’s glossary, which is intended to offer Members a guide to healthcare reform terminology, linked here.

How You Can Contribute

We invite BioNJ Members to send us your related tools and resources and we will post them as appropriate. Please send them to BioNJ@BioNJ.org.